Why Tiger’s Endorsement Empire is Safe

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DORAL, FL - MARCH 13: Tiger Woods waits to play a shot on the 13th hole during the second round of the World Golf Championships-CA Championship at the Doral Golf Resort & Spa on March 13, 2009 in Miami, Florida. (Photo by Sam Greenwood/Getty Images) *** Local Caption *** Tiger Woods

How deep is the financial hole? How fast can the dirt be patched? The answers, according to some of marketing’s top minds, depend on Woods’ follow through and whether additional hazards lurk in the weeds. Hazards like more whispers (or worse) of marital infidelity. Hazards like continuing police probes.

Despite a bunkered icon measuring his words and scant facts beyond a crumpled Caddy and a man’s lacerated lip, business experts seem to agree that Woods’ peculiar, post-Thanksgiving front-yard car crash is not likely to trim the golfer’s lush endorsement empire. Years of on-course mastery and a generally immaculate image give Woods vast personal equity with fans, the public and corporate America.

And as indiscretions go, this is not Michael Vick, say sports marketers. This is not Michael Phelps. This is not Kobe Bryant. Not yet, anyway.

“I’m convinced that this will not cause the end of Tiger Woods Inc. as we know it,” said Paul Swangard, managing director of the University of Oregon's Warsaw Sports Marketing Center.

“He’s built a cache of goodwill that’s a mile and a half deep,” added Peter Shankman, founder of The Geek Factory, a New York City marketing and public-relations strategy firm. “He’s not Eliot Spitzer. He’s not Paris Hilton. He is Tiger. And other than mouthing (an occasional curse word) on NBC Sports after a bad shot, he’s had no problems. He hasn’t killed anyone. He didn’t run over a person. Hell, he didn’t run over a dog.

“That being said, let’s see what happens now with the (National Enquirer-alleged) mistress and with the cops. The cops haven’t said what they’re going to do. If they do anything,” Shankman said. “That’s a different game.”

Muddying the matter, of course, has been Woods’ decision not to speak to police following the Nov. 27 accident. At 2:25 a.m., Woods drove his 2009 Cadillac SUV out of his Windermere, Fla., driveway, abruptly clipped a fire hydrant and then hit a tree. His wife, Elin Nordegren, told officers that upon hearing the crash, she dashed outside to investigate then used a golf club to break open the SUV’s rear window and help her husband escape the vehicle. The timing of the wreck collided with a report, days earlier, in the National Enquirer that linked Woods romantically with Rachel Uchitel, a New York nightclub hostess. Uchitel subsequently denied any affair.

Woods, the first $1 billion-earning athlete, said Sunday through his website: “The many false, unfounded and malicious rumors that are currently circulating about my family and me are irresponsible.” On Monday, he announced that his crash injuries would prevent him from playing in his own tournament – the Chevron World Challenge – which opens play today in Thousand Oaks, Calif.

To be sure, the chain of events was ugly. But it’s been Woods’ lack of explanation that has tainted his once-shimmering brand with “a stigma,” said Robert Tuchman, executive vice president of Premier Global Sports, based in Bannockburn, Ill. As a corporate face and pitchman for Nike, American Express, AT&T and six other companies, Woods’ endorsement income has quadrupled his PGA Tour winnings. In 2008, he pocketed $105 million in sponsorship deals, according to Sports Illustrated. Nike and Gatorade have released statements reinforcing their ties to Woods.

“The problem is not so much what happened but the way he’s handling it, not being forthright, not coming out and being completely honest,” Tuchman said. “His endorsers are not going to drop him. Unfortunately, though, a lot of people who were thinking possibly about using him for an endorsement, they might just withhold. A lot of marketers don’t get near someone who potentially could get into a situation like this.”

Such damage assessments of an icon’s marketing muscle expose the odd system of justice that exists only on Madison Avenue. In the endorsement world, smoking marijuana – as Michael Phelps admitted doing – or drunken driving – for which numerous star athletes have been convicted – are simply not as career-tarnishing as cheating on a spouse, said Bob Williams, the CEO of Burns Entertainment and Sports Marketing, based in Evanston, Ill.

“Is the storyline going to stay the same? Or is there going to be another female who comes out of the wood work now claiming some kind of relationship with him?” Williams asked. “We only have to go back to Kobe Bryant to see what can happen when an A-list celebrity is not faithful to his wife, and what that can do to his endorsement career.”

In 1993, the Eagle, Colo., sheriff’s office arrested Bryant in connection with a sexual assault charge filed by a 19-year-old employee at a hotel where Bryant had stayed. The Los Angeles Lakers star denied the rape allegation yet publically admitted to a sexual encounter with his accuser. Authorities later dropped the criminal case but Bryant’s once-elite status as a corporate face and spokesman lapsed and never fully recovered.

“It has taken him years to resurrect his endorsement career,” Williams said. “He’s done a pretty good job of getting back into that world. But it would be so much more given the NBA title he just won. He could have been in the stratospheric level like Tiger Woods or Michael Jordan. It cost him millions and millions of dollars. With Tiger, it’s too early to say. It could be very damaging to him if someone else were to step out and claim infidelity.

“It’s a topic you definitely want to stay away from if you’re an A-list athlete. Infidelity is a terrible thing. But it seems like there are other things that happen to celebrities that are just as bad – or worse – for which the public seems to be more forgiving.”

The Tiger Woods brand has largely been forged by his iceman perfection on the course – his almost robotic ability to concentrate past all distractions and study the next shot, the terrain, and the conditions, and then to execute. He is often fiery at play yet always tightly controlled when speaking with the media. Could this momentary glimpse into his mortal, regular-guy side perhaps soften or alter his long-standing brand?

“It does humanize him,” Tuchman said. “(Companies) use him in a lot of ways because he is this guy who is Superman, who doesn’t seem human. But this might add another element – this guy has problems too, just like you and me.”

“A brand is like a sponge – you’re going to pull in a lot of different things along the way,” added the University of Oregon’s Swangard. “Tiger has mostly positive connotations. He’s been a well-managed brand. He’s got smart people around him. The advice to him should be to deal with this in a way that is authentic to who he is. But don’t let it drag on.

“We always say goodwill is like a retirement account. Well, he’s going to have to dip into that account in the short term. But I expect him to come out fully intact in the long run.”